News that Bank Emirates NBD takes over Dubai Bank is unlikely to trigger a wave of consolidation in the Gulf Arab region. This is not a typical merger, but rather a handover arranged by the state.
Dubai Bank, which was hit hard by the financial crisis and has stopped publishing financial figures in 2009, was taken over by the Dubai Government on May 16 this year. The government, under its ruler Sheikh Mohammed Bin Rashid Al Maktoum, bailed out the Islamic financial institution and now handed it over to Emirates NBD, the United Arab Emirates's largest lender in relation to assets.
Dubai Bank, on the other hand, is behind rank 40 among the 51 banks in the UAE. A total of 23 local lenders and 28 foreign banks share the UAE market.
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